Times Mirror Co. said Tuesday that it has agreed to sell two television stations that it would acquire in its pending acquisition of the Baltimore Sun to Gillett Group of Nashville, Tenn., for more than $200 million in cash.
Gillett will buy stations WMAR-TV in Baltimore, an NBC affiliate, and WRLH-TV in Richmond, Va., an independent.
The sale is tied to the previously announced $600-million acquisition by Times Mirror of A. S. Abell Co., which owns the two stations and the evening and morning Baltimore Sun newspapers.
Times Mirror was required to sell the Baltimore station because Federal Communications Commission regulations prohibit one company from acquiring both a newspaper and a television station in the same city. The sale, which is expected to become final later this year, is subject to completion of the Times Mirror acquisition of Abell and requires FCC and other regulatory approvals.
Times Mirror is a Los Angeles-based diversified media company that publishes eight newspapers, including the Los Angeles Times, Newsday, the Hartford Courant and the Denver Post.
Bruce Thorp, an analyst with the New York brokerage firm of Lynch, Jones & Ryan, said $200 million is more than his firm had estimated that Times Mirror would get for the stations. "I would think that Times Mirror would be happy with that price."
Thorp said the price being paid for the TV stations thus reduces the effective price that Times Mirror is paying just for the newspapers. In effect, he said, the company will pay roughly 2.3 times the papers' 1985 revenue, roughly 33 times their annual profits and about $1,120 per subscriber.
By contrast, Gannett Co. recently paid 2.9 times revenue, 58 times profits and $1,000 per subscriber for the Louisville Courier-Journal, although Thorp said the Sun numbers are "still on the premium side."
Times Mirror Chairman Robert F. Erburu said: "In seeking a buyer, we have been mindful of our responsibility to place (the stations) in the hands of a company that would uphold (their) high standards of journalistic excellence and community service."
Gillett currently owns stations in Nashville; Kalamazoo-Grand Rapids, Mich.; Rochester, N.Y.; Lincoln-Grand Island, Neb.; Eau Claire-La Crosse, Wis., and Sioux City, Iowa. The company also owns a ski resort in Vail, Colo., and a beef processing plant in Green Bay, Wis.